Stakeholder Dialogue
FENC identifies stakeholders and material topics regularly to ensure alignment with corporate management and stakeholder expectations.
Identification of Materiality
Each year, the stakeholders and material topics are identified by the executive managers and Sustainability Implementation Committee, and the internal and external feedback is gauged through surveys to keep the sustainability management and reporting at FENC in alignment with the expectations of all stakeholders.
FENC follows the procedures for the identification of material topics in the 2021 version of the GRI Standards, developing the framework for materiality analysis based on the principles of identification, analysis and verification. Having incorporated the sustainability disclosure standards in the International Financial Reporting Standards (IFRS) in 2025, “community” is added as a key stakeholder to identify and assess operational impacts at a more comprehensive level. In 2022, surveys were administered internally and externally with a total of 423 valid surveys collected. Between 2023 and 2025, in light of the rapidly changing external environment and to increase stakeholder participation, additional surveys were administered to 342 stakeholders. The outcomes were combined with that from the 2022 survey for analysis. External experts were consulted regarding the process and result of identifying stakeholders and material topics, which were then presented to the executives for confirmation. The Sustainability Committee members gave the final approval.
.png)
The Company adopts the Double Materiality principle proposed by the European Union to identify 14 material topics that have significant impacts both on the Company’s operations and on external economic, environmental, and social (including human rights) aspects. The process and results of material topic identification form an integral part of the Company’s risk management system, which includes established management approaches and effectiveness evaluation mechanisms for each material topic. Compared with the result from the previous year, while the number remains the same at 14 in 2025, the material topics identified are different. “Customer Relations Management” is added, and “Sustainable Supply Chain Management” has been repositioned as a non-material topic. To align with the IFRS sustainability disclosure standards, “Occupational Safety and Health” has been renamed to “Operational and Occupational Safety.” Regarding “Community Relations,” though the topic was not identified as a material topic, it is added to the list of sustainability issues requiring ongoing management during the reporting year due to substantial stakeholder concern.
Matrix of FENC Material Topics
.png)
Positive and Negative Impact and Scope of Value Chain Impact
Refer to the material topics identified in 2022, executive managers and the Sustainability Team conducted impact analysis to assess their positive and negative impact as well as the scope of value chain impact. Each material topic was assessed against current corporate strategies and management guidelines to measure the positive impact and likelihood of occurrence regarding the aspects of economy, environment and people, including human rights. The assumption for the assessment of the negative impact, no action, would lead to the inability to prevent or mitigate the negative impact, and was used to assess the likelihood of occurrence and severity regarding the three aspects.
Top Three Issues with Positive Impact
.png)
Top Three Issues with Negative Impact
.png)
Linkage Between Executive Remuneration and Material Topics
Material Topics | Links to Changes in Executive Compensation |
Business Performance and Strategy | Business performance and strategy are key indicators for the annual operational review, thus linked to changes in executive compensation. |
Energy and Resource Management | Energy and resource management is a key indicator for the monthly operational review, and the monthly energy consumption rate is linked to changes in executive compensation. |
Environmental Management | Environmental management aims to minimize negative impacts to the environment through approaches such as minimizing air pollutant emissions, implementing water resources management and linking executive compensation to relevant indicators. |
Climate Strategies and Low Carbon Transition | Executive compensation is linked to GHG emissions. |
Green Product | Executive compensation is linked to the revenue share of sustainable products. |
Operational and Occupational Safety | Executive compensation is linked to the implementation of operational and occupational safety, which also covers the establishment of emergency preparedness and response mechanisms with zero fires and zero chemical spills as the goals. |
Note: Executives whose compensation is linked to the material topics include the president, chief operating officer and those in charge of implementations concerning material topics, including the executive vice president, assistant vice president and manager. |
Impacts of Material Topics and Value Chain Impact Assessment
Material Topics | Impacts on External Economy, Environment and People, Including Human Rights | Value Chain Impact Assessment | ||||
Suppliers | FENC | Customers | ||||
| Production Business | FERD | Foundations | ||||
Green Products | The development of green products may fulfill FENC’s green commitment to brand customers, promote economic growth and mitigate environmental impacts. | ● | ● | ● | ||
Environmental Management | Business operations may lead to air pollution, waste and impacts on biodiversity. | ● | ● | ● |
| |
Climate Strategies and Low Carbon Transition | The inability to effectively control GHG emissions will lead to worsening climate conditions and business environments. | ● | ● | ● | ● | |
Energy and Resource Management | Environmental impacts may be reduced by monitoring the current energy and resource usage and adopting a host of conservation measures. |
| ● | ● | ||
Operational Performance and Strategies | With steady refinement of business strategies, FENC maintains the industry-leading status, drives industry evolution and promotes economic development. |
| ● | ● | ||
Corporate Sustainability Governance | By establishing a comprehensive governance framework, FENC balances the sustainable development of the environment, society and corporate governance to create values for all stakeholders. | ● | ● | ● | ||
Sustainable Corporate Image | FENC may examine the direction of sustainable development and elevate stakeholders’ willingness to invest in the Company by participating in global sustainability ratings, forums and conferences to engage and interact with stakeholders. |
| ● | ● | ● |
|
Risk Managemen | The establishment of a sound risk management mechanism may reduce the degree and likelihood of impacts from environmental and man-made factors. |
| ● | ● | ||
Production and Product Innovation | Leveraging its R&D capabilities, FENC develops forward-looking products and transitions to smart production, operation and product services to promote industry growth. | ● | ● |
|
| ● |
Product Accountability and Life Cycle Assessment | Impacts on the environment and human health may be mitigated by gauging the scale and significance of potential environmental impacts with product life cycle assessments and improvements from the management and R&D perspectives. | ● | ● |
| ||
Operational and Occupational Safety | The implementation of operational and occupational safety management establishes a safety culture, ensures process control and reduces the risk of occupational injuries and accidents, thus protecting the physical and mental health of employees and contractors and maintaining operational resilience and productivity. | ● | ● | ● | ||
Sustainable Community | With environmental protection and low-carbon operation as the goal, FENC strikes a dynamic balance between the man-made and natural environment, building a smart industrial park through advanced technologies to foster a sustainable ecosystem. |
| ● | |||
Corporate Governance | With integrity as the highest guiding principle, FENC builds a robust governance system to facilitate corporate management and maximize the interests of all shareholders. |
| ● | ● |
| |
Customer Relations Management | FENC refines customer engagement and services and provides a wide range of innovative products and comprehensive after-sales service to help customers achieve their sustainability targets, generate revenue growth and build a sustainable corporate reputation. |
| ● | ● | ● | |
Note: The significance of material topics to FENC, specific management guidelines and short-, mid- and long-term targets are provided in the following chapters. There are eight additional topics listed as sustainability issues instead of material topics. They are “land resources management,” “sustainable supply chain management,” “employee career planning,” “digital resilience,” “workplace diversity and inclusion,” “stakeholder engagement,” “community relations” and “social impact.” Details are also provided in the ensuing chapters. |
